Direct mail remains the primary marketing channel for providers of consumer related services such as credit card issuers, mortgage providers, insurance companies, auto financing companies, and retail and private banking institutions. Although the present discussion will focus primarily on the issuers of credit cards, the present invention is applicable to any of the above industries without limitation.
The goal of direct mail marketing is to identify and contact potential customers and to present those customers with offers which will hopefully turn them from potential into actual customers. For the credit card industry alone, it is estimated that credit card solicitations for year ending 1997 reached an annual rate of 3.5 billion offers per year. This represented an increase of approximately 29% over the number of solicitations made in 1996. Unfortunately, the net response rates across the industry have declined by 26% over the past two years and the average cost per booked account has increased by 45% over the same period. These last two facts highlight the need for new methods and systems for offering these financial products.
A prior art process for generating a direct mailing is depicted in FIG. 1. As seen in this Figure, the process is a linear one, in which a subsequent processing step cannot begin (or at least complete) until the prior processing step has been completed. In step 100 of the prior art process, the concept for the direct mailing is developed. This step 100 could include, for example, identifying new products (e.g., a new interest rate credit card) for marketing to potential customers. The next step in the process is gathering data regarding the potential consumers to be targeted by the direct mailing. In regard to credit card marketing, the single largest source of data with respect to potential customers is from one or more Credit Bureaus. Presently there are three Credit Bureaus in the United States, Transunion, Experian and Equifax, from which data on consumers can be purchased. Other sources of data include demographic data from, for example, magazine subscription companies, mortgage companies or catalog companies. Once the data on potential customers had been gathered in step 105, it is “cleaned” in step 110. Such “cleaning” includes eliminating duplicate data and eliminating incomplete data.
Step 115, entitled Relationship ID, entails identifying and/or establishing relationships between the records in the database. For example, this step 115 could include identifying households with one or more consumers. Once the database has been gathered, cleaned-up and the proper relationships have been identified, Analysis and Campaign Design occurs in steps 120 and 125 respectively. The analysis of the raw data and the objectives of the goals of the direct mail campaign leads to the actual design of the campaign. The actual design will typically be in a tree type structure which starts off with broad categories, such as which credit card products to promote. The next level in the design tree might be the different types of terms available on each of the credit cards. A final level in the tree, the “leaves”, might be the color of the actual envelope which is to be sent to certain groups of potential consumers. The leaves of the design tree are also sometimes called the market cell. The targeted consumers in the market cell have some common core of attributes (e.g., income and geographic location) in common which allow them to be grouped together for specific marketing (i.e., targeting).
Once the design of the campaign has been completed in step 125, it is executed and output in steps 130 and 135. Execution in step 130 involves the physical compilation and assembly of all of the materials to be included in the offers to the potential consumers. Output in step 135, as implied, involves the actual mailing of the marketing materials. Once the campaign is in progress, an extremely important step 140 is the reporting and tracking of the progress of the campaign. Essentially, this step 140 involves tracking which consumers responded positively to the direct mailing.
The reporting and tracking of the campaign typically takes place over a number of months because the direct mailings typically include an expiration date, after which the offer is no longer valid. Of the consumers which have responded positively to the direct mailing, there is still a further step in the process. Due to the time between developing the campaign and the receipt of a positive response thereto, the positive response could have been received anywhere between one to three months, or possibly even six months, after the original data from the Credit Bureau was checked. Because of this time lag, a consumer who has indicated interest in accepting the offer detailed in the direct mailing will have his/her credit information rechecked with the Credit Bureau data at step 145 to determine if that particular consumer's financial situation has changed between the time of the previous data check. This involves obtaining data for that particular consumer from the Credit Bureau again, and re-verifying that data to make sure the consumer has not, for example, declared bankruptcy within the time period between the last review of the Credit Bureau data and the acceptance of the mailed offer. This step ensures that the offeror of the direct mailing will not extend credit to higher risk prospects.
Although the process depicted in FIG. 1 has worked for years, its biggest drawback is the back-end process of rechecking the credit data of the consumers who have positively responded to the direct mailings. Also, the prior art process, because of the time constraints and volumes of data involved, does not easily lend itself to personalized offers made specifically for a particular consumer based on their data, but rather only facilitates general offerings to groups of individuals with similar financial/demographic data. Further, because of the time required to gather, clean and index (relationship ID) the raw data, and the additional time required to execute and output the campaign, approximately only four days are available to complete the most important aspects of the process, the analysis and design steps.
Another system for pre-screening a customer for a proprietary credit card (i.e., a department store credit card) has been developed and implemented by Equifax. This system operates within the department store when a customer writes a check towards the purchase of store items. During the check verification process, the check writer is asked for their driver's license number during the normal check approval process. While the check is being authorized, the pre-screening system, relying upon parameters programmed into the system by the department store, pre-screens the customer for the proprietary card, discerning whether the check writer already has the proprietary card, has been offered one recently, and qualifies for a proprietary card. If the check writer qualifies and has not already been offered a card, the system prompts the sales person to suggest one to the check writer. If the check writer chooses to accept the proprietary card, they are given a temporary card and are free to charge purchases onto the that card.
There are, however, certain drawbacks and disadvantages to this system. First, since the system relies upon the customer to first write a check towards the purchase of an item, this system is only usable within the store itself and not in an electronic, or on-line, environment. Also, because a check must first be written, the customer will typically not destroy the check in favor of purchasing the item(s) for which the check was written on the temporary credit card. This is a major drawback to this system because the issuer of the credit card (here the department store) will lose the revenue which could have been generated from the items purchased by check. Accordingly, there still remains the need to screen customers in an electronic environment to determine if they qualify for the offer of a financial product(s) and that this financial product be immediately usable by the customer.